Unrest grows in Israel over social inequality

Sign of the times in Israel as people protest about the concentration of wealth.
Photo Reuters

by
Ethan Bronner

They are mainstays of the society pages and glossy magazines. Some are praised for the hospital wings they have built, others are gossiped about for their quirks.

But these days, the handful of wealthy families who dominate the Israeli economy are assuming a new role: one of the chief targets of the tent-city protesters who have shaken Israel in the past month.

The “tycoons", as they are known even in Hebrew, are suddenly facing enraged scrutiny as middle-class families complain that a country once viewed as an example of intimate equality today has one of the largest gaps between rich and poor in the industrialised world.

The tent-city protesters, who have shifted the public discourse by demanding affordable housing and other essential goods, issued a document this week calling for a new socio-economic agenda. Topping their goals: “minimising social inequalities".

“What is keeping people on the streets is the question that if we are all having a hard time and we are all working and paying taxes, who is making the profits?" said Daphni Leef, a 25-year-old filmmaker who began this movement with a Facebook posting and remains at its centre. “We know there are certain families that have a lot of money and a lot of influence and there is no transparency. People feel deceived."

Those families – the Ofers, the Dankners, the Tshuvas, the Fishmans and others – account for the 10 biggest business groups in Israel and together control some 30 per cent of the economy.

They will doubtless be among the targets at another set of street demonstrations planned for this weekend.

“It is becoming clearer to more and more people that this issue of concentration of wealth has become more important," said Einat Wilf, a legislator who submitted a bill last year to tackle the issue.

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“As a result of the protests, there is much more political will to fight it than in the past."

Others say that wealth concentration is only one of a number of factors contributing to the current middle-class lament and that focusing on it diverts attention from other equally important matters. They point to things such as a swollen defence budget, subsidies for the ultra-Orthodox and the cost of settlements in the West Bank and East Jerusalem, where the Interior Ministry said that it would build 1600 units and announced plans for 2700 more. But the issue has had strong populist resonance.

Although Israel’s economy is strong, the data on wealth concentration, published by the Bank of Israel, are unsettling.

A small group of family-owned companies control banks, supermarket chains and media, mobile phone and insurance companies. They borrow heavily, posing risks for the larger economy and, through a web of interconnecting enterprises, make it harder for others to get into the markets they dominate.

Prime Minister
Benjamin Netanyahu
formed a committee to examine the concentration of wealth and find ways to reduce the power of monopolies. It is expected to make recommendations in the next month or two.

They may include a change in the corporate tax code as well as antitrust regulations making it harder or illegal to own across sectors, resembling steps taken in the United States in the first half of the 20th century.

But they will not recommend the kind of income redistribution many protesters are seeking.

“It used to be politically impossible to go after the cartels, but now that 300,000 people have gone out in the street, we have a mandate," said an aide to Mr Netanyahu. “But the Prime Minister is not going to make this a socialist country again."